Winsted sewer, water rates going up April 1

By Jason Siedzik

Thursday, March 21, 2013

WINSTED >> Water and sewer users are about to have their wallets tapped to help repay the town's deficit, following Wednesday night's public hearing.

The board voted 4-0 to adopt the new rates, which will take effect on April 1. These new rates will call for substantial increases to rates for users of municipal water and sewer services, but even these higher charges may not be enough to make the board whole, after a deal involving New Hartford will likely cut into Winsted's sewer revenue.

"We've got to make up a couple million dollars," said commission member Tim Moran. "There's no way around it."

The commission owes about $3.2 million to the town, following a decade of deficits. In order to repay that sum, the board will raise rates on sewer users by 20 percent and water rates by 33 percent.

By raising the rates over an eight-year span, the Water and Sewer Commission plans on raising $3,477,096 in revenue, which will repay the deficit.

These rate increases will lapse at that time, leading Second Selectman Candy Perez -- who suggested including the increased part of the rates on bills as a separate line item -- to say that "eight years out, when you get to those rates, it'll be like retiring a bond."

But those rates may not be enough, thanks to a deal struck by the town of New Hartford with Russ's Septic Service in Riverton. The deal, which was approved on March 18, will likely cost the Winsted water and sewer funds over half of their anticipated private sewer revenue.

"They didn't put it out to bid," said Water and Sewer Commission chairman Richard Nalette, "Surprise surprise, and they didn't give us the opportunity."

Nalette said the deal would cost the town 60 percent of its private septic revenue, which Nalette estimated would be a total of $125,000.

At that rate, the town will miss out on $75,000 per year in additional revenue, costing the commission $600,000 in the eight-year term of the elevated rates. That decision slashed into one of the few sources of funds for the commission.

"Unfortunately, the Water and Sewer Commission has two sources," said Nalette, "Rates and borrowing."

The commission ran deficits for so long, according to town attorney Kevin Nelligan, because it had received bad information from former finance manager Henry Centrella. Centrella was terminated in January for a number of alleged actions, including making unauthorized fund transfers to cover deficits resulting from the Water and Sewer Commission's bond service. If not for the bonds, the commission would have been profitable, but years of flat rates ate into their margin for error.

"We relied on the finance department, and that's where we're at," Moran said. "We're running at a loss. We can't run at a loss any more."

But between the rate increases and lost revenue, some residents offered suggestions for alternate streams of funds. David LaPointe, who brought a case of bottled water to the Board of Selectmen meeting before being thrown out by Winchester Mayor Maryann Welcome, said that he brought the water to illustrate that the commission could sell the town's water to bottling companies. The water LaPointe brought to the meeting was purified municipal water from Pittsfield, but Nalette said that the town had already been down that path before.

"The problem is we can't market it," said Nalette.

Other moves in neighboring towns could result in some more funding for the commission as well. Charlotte Hungerford Hospital's decision to move their services from the Winsted Health Center to a new facility in Barkhamsted was enabled in part because the commission agreed to provide water and septic services to the new building, which will be just over the border near the Mallory Brook Plaza.

"The Water and Sewer Commission's going to get money in the Barkhamsted deal," pointed out one audience member, "But the medical center's going to pay property tax."

Another audience member made a plea for more civil discourse in Winsted, especially in light of the Water and Sewer Commission's situation.

Woody Dawson described the commission as "intelligent people," remarking that "they do their work, what they're capable of. They put their trust in somebody because it was beyond their capacity."

"Everybody comes up and has a lot to say, but I don't see them on any boards, making any decisions," Dawson continued. "They all want to grandstand and walk out of here like they're a hero, but they haven't contributed anything."